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Federal paid sick leave starts April 1, 2020

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New federal mandates start April 1, 2020

  • The Washington State Department of Labor and Industries said it is still scoping how the new federal paid sick leave will interact with the state’s protections. We’ll post updates here as soon as we are able to verify information.

Here is what we know today.

On March 18, 2020, President Donald Trump signed into law paid sick leave benefits surrounding coronavirus.

All U.S. employers with fewer than 500 employees will be required to offer two weeks of paid sick leave for employees who meet the following qualifications:

  • Subject to a government quarantine or isolation order related to coronavirus
  • Have been advised by health provider to self-quarantine because of coronavirus
  • Experiencing symptoms of coronavirus and seeking medical diagnosis
  • Caring for an individual subject to quarantine order or self-quarantine
  • Caring for children if schools are closed or their caregiver is unavailable because of a public health emergency
  • Experiencing substantially similar conditions as specified by the Secretary of Health and Human Services

Employees will be compensated at their regular rate of pay, not to exceed $511 per day, or $5,110 in aggregate for the two-week period.

However, if the employee is absent to care for a sick family member, a child unable to attend school, or because they meet the criteria for similar conditions they are compensated at 2/3 of the rate they would otherwise receive, but not to exceed $200 per day and $2,000 in the aggregate. (This conforms the pay to the amount of the available tax credit.) 

Funding

The employer will be reimbursed for the costs of the leave through a fully refundable tax credit equal to 100% of the qualified sick leave wages. The tax credit will be applied against employer Social Security taxes, but employers are reimbursed if their costs for qualified sick leave exceed the taxes they would owe.

Additional credit for health plan expenses

The amount of the tax credit is further increased by the amount of the expenses of the employer’s health care plan allocable to the qualified sick leave. This allows the employer to seek reimbursement for the cost of continuing to provide health insurance while the employee is on sick leave.

Small Business Exemptions

The Secretary of Labor is authorized to issue regulations to exempt small businesses with fewer than 50 employees from the requirement to offer leave to care for a child when a school is closed when the imposition of paid sick leave would jeopardize the viability of the business as an ongoing concern.

Relationship to Existing Programs

This paid sick leave is in addition to whatever sick leave is already offered by the employer (including subject to state or local requirements).

Effective Dates

The provision takes effect not later than 15 days after enactment of the bill and sunsets on Dec. 31, 2020.

Paid Family & Medical Leave

Employers with fewer than 500 employees will be required to provide employees with up to 12 weeks of paid family and medical leave as long as the employee has been employed for at least 30 days.

The employee may only use the leave if they are:

• In a coronavirus quarantine or treatment or;

• Caring for a child due to school closings or a childcare disruption.

After 10 days, during which time the employee can take unpaid or paid leave (if available), employees are compensated at 2/3 of their regular rate. Paid leave under this requirement shall not exceed $200 per day and $10,000 in the aggregate.

Small business and other exemptions

The Secretary of Labor is authorized to exempt small businesses with fewer than 50 employees if the requirement would jeopardize the business as an ongoing concern. The requirements to restore the employee to their position after the paid leave is taken do not apply to businesses with fewer than 25 employees if the position no longer exists because of the public health emergency (provided the employer takes certain actions to try and assist the employee).

Funding

Each quarter, private sector employers subject to the requirement are entitled to a fully refundable tax credit equal to 100% of the qualified paid FMLA wages paid by the employer. Qualified paid FMLA wages are capped at $200 per day and $10,000 overall. The tax credit is applied against employer Social Security taxes, but employers are reimbursed if their costs for qualified paid FMLA exceed the taxes they would owe.

Additional credit for health plan expenses

The amount of the tax credit is further increased by the amount of the expenses of the employer’s health care plan allocable to the qualified sick leave. This allows the employer to seek reimbursement for the cost of continuing to provide health insurance while the employee is on sick leave.

Effective Dates: The provision takes effect not later than 15 days after enactment of the bill and sunsets on Dec. 31, 2020.